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In today's highly developed market economy, enterprise merger and acquisition has become a common practice. There are many ways of enterprise merger and acquisition, one of which is to control the operation of the other party by acquiring the equity of the acquired party. If the loan handled by an enterprise is used for equity acquisition, it is called equity acquisition loan. So what are the provisions of the state on equity M&A loans? The following will help you answer.

I. M&A loan

The so-called M&A loan refers to the local and foreign currency loans issued by commercial banks to M&A enterprises or holding subsidiaries of M&A companies to pay the consideration of M&A shares. It is a loan issued to meet the financing needs of domestic superior customers in the process of restructuring and restructuring, such as paid merger and acquisition of other domestic enterprises and institutions, completed projects, asset-debt restructuring, etc. M&A loan is a special form of project loan. Ordinary loans are the best in the order of repayment, but if loans are used for equity acquisition, debts can usually only be repaid through equity dividends.

Second, the relevant provisions

Last year 12

The ninth month

China Banking Regulatory Commission issued the Guidelines on Risk Management of M&A Loans of Commercial Banks. This is the first time that Chinese banks have launched M&A loans since the opening of M&A loans. The basic principle of M&A loan stipulated by CBRC is to meet the market demand to the maximum extent and help commercial banks control loan risks.

The M&A loan stipulated in the Guidelines is used to support domestic M&A enterprises to bid for M&A transactions by transferring existing shares, subscribing for new shares or purchasing capital. According to the relevant requirements of CBRC, M&A transactions supported by bank loans must be legal and compliant first. Involving national industrial policies, industry access, anti-monopoly, transfer of state-owned assets and other matters, it shall obtain the approval of relevant parties in accordance with applicable laws, regulations and policies and perform relevant procedures. In addition, CBRC encourages commercial banks to mainly support strategic mergers and acquisitions when developing M&A loan business at this stage, so as to better support China enterprises to improve their core competitiveness and promote industrial restructuring through mergers and acquisitions. Production, debt, etc. In order to achieve the purpose of merger or actual control of established and continuing operations.

In order to ensure the safety of loans, China's commercial banks were previously forbidden to invest in the equity field. The general rules for loans formulated by the central bank in 1996 stipulate that commercial banks shall not provide M&A loans.

At present, China's M&A financing system is still far from perfect. Laws and regulations such as the General Principles of Loans actually prohibit financial institutions from providing funds for M&A activities of equity transactions; There are also strict restrictions on the issuers of corporate bonds, and the issuance of bonds also has annual total control, interest rate level control and use restrictions; In terms of equity financing, China's public offering needs the approval of the issuance audit Committee of the China Securities Regulatory Commission, which is inefficient.

Through the above, we have a general understanding of the policies and systems of some countries on equity M&A loans. The effective implementation of these systems is conducive to solving the problem of funds for enterprises to acquire equity, and also opens up new business areas for commercial banks. If you want to know more about this, you can consult a lawyer in Shenyang.

Extended reading:

Is mergers and acquisitions good or bad? What are the forms of merger and reorganization?

What are the aspects involved in post-merger integration?

What are the ways of merger and reorganization of listed companies?